Attitudes towards more-efficient incentives for promotion of residential PV systems: A case study of Kerman, Iran

Abstract

In Iran, the feed-in tariff (FIT) has been used for the promotion of photovoltaic (PV) systems, as an incentive, FIT cannot adjust power consumption. On the other hand, the PV generation has not reached grid parity; therefore, a tariff-based method for self-consumption is not attractive. This study presents a novel efficient incentive for the deployment of residential PV systems, which is based upon the levellised value of energy. The avoided cost-based method is proposed to evaluate the true value of PV (VOPV), including three main parameters: avoided energy cost, avoided capacity cost and avoided carbon emission cost. Numerical results show that in the first steps of the PV penetration, VOPV is more than the current FIT that makes self-consumption beneficial. The proposed model can both increase or decrease customer loads based on PV output and grid conditions. By applying this method, the domestic consumers will be willing and able to provide demand adjustment and it may increase the share of investment on residential solar systems with a reasonable profit. It can be shown that the proposed self-consumption platform can reduce losses and capacity requirements and consequently increase efficiency.